Corporate Presentation nd Quarter 2020 Financial Results · 2020. 8. 14. · This presentation may...

Corporate Presentation

2nd Quarter 2020

Financial Results

14 August 2020

Important Notice

This presentation is for information only and does not constitute an invitation or offer toacquire, purchase or subscribe for units in MRCB-Quill REIT (“MQReit”). The past performanceof MQReit is not necessarily indicative of the future performance of MQReit.

This presentation may contain forward-looking statements that involve risks and uncertainties.Actual future performance, outcomes and results may differ materially from those expressedin forward-looking statements as a result of a number of risks, uncertainties and assumptions.Representative examples of these factors include (without limitations) general industry andeconomic conditions, interest rate trends, cost of capital and capital availability, competitionfrom similar developments, shifts in expected levels of property rental income andoccupancy, changes in operating expenses including employee wages, benefits andtraining, property expenses and governmental and public policy changes. You arecautioned not to place undue reliance on these forward-looking statements which arebased on the manager’s current view of future events.

The value of units in MQReit (Units”) and the income derived from them may fall as well as

rise. Units are not obligations of, deposits in, or guaranteed by, the manager or any of itsaffiliates. An investment in Units is subject to investment risks, including the possible loss of theprincipal amount invested. Investors have no right to request the manager to redeem theirUnits while the Units are listed. It is intended that unitholders may only deal in their Unitsthrough trading on the Main Board of Bursa Malaysia Securities Berhad. Listing of the Units onthe Bursa Securities does not guarantee a liquid market for the Units.

The information in this Announcement must not be published outside Malaysia.

MRCB-Quill REIT Presentation *August 2020*2

Contents

MRCB-Quill REIT Presentation *August 2020*

• Financial Results

• Portfolio Update

• Conclusion

Slide No.

4

12

16

3


Quill Building 5 - IBM

Financial Results

Achieved EPU of 1.78 sen for 2Q 2020

(RM’000) (Unaudited)

2Q 2020

Net Income 1

EPU 2

Net Property Income

Gross Revenue

1 Net Income refers to realised income after taxation (exclude gain from re-measurement of derivatives and revaluation surplus)

2 EPU refers to Realised Earnings Per Unit

3 Distributable Income refers to realised income after taxation adjusted for Manager's management fee payable in units and income previously not distributed.

4 DPU refers to Distribution Per Unit

Variance

3.4%

16.0%

16.0%


(Unaudited)

2Q 2019

40,108

31,484

1.78 sen

6.5%

9.9%1.78 senDistributable Income

Per Unit

16.0%19,081Distributable Income 3

5

19,081

38,779

29,080

1.54 sen

1.62 sen

17,355

16,455

Declares DPU of 3.43 sen for 1H 2020

(RM’000) (Unaudited)

1H 2020

Net Income 1

EPU 2

Net Property Income

Gross Revenue

1 Net Income refers to realised income after taxation (exclude gain from re-measurement of derivatives and revaluation surplus)

2 EPU refers to Realised Earnings Per Unit

3 Distributable Income refers to realised income after taxation adjusted for Manager's management fee payable in units and income previously not distributed.

4 DPU refers to Distribution Per Unit

Variance

2.4%

8.4%

8.4%


(Unaudited)

1H 2019

82,844

64,280

3.63 sen

3.9%

5.7%3.63 senDistributable Income

Per Unit

5.7%38,866Distributable Income 3

6

3.43 sen -DPU 4

38,866

80,909

61,867

3.35 sen

3.43 sen

36,762

3.43 sen

35,862

Unaudited

as at

30 Sept 2019

(RM’000)

Audited

as at

31 Dec 2019

(RM’000)

Unaudited

as at

31 Mar 2020

(RM’000)

Unaudited

as at

30 Jun 2020

(RM’000)

Non Current Assets 2,180,173 2,144,136 2,144,013 2,143,808

Current Assets 53,411 69,568 59,757 84,846

Total Assets 2,233,584 2,213,704 2,203,770 2,228,654

Current Liabilities 353,817 354,118 18,838 25,351

Non Current Liabilities 532,235 877,452 877,452 876,742

Net Assets before

Distribution1,347,532 1,323,489 1,307,480 1,326,561

Provision for Distribution (17,637)* (36,119) (19,785)* (36,762)

Net Assets after Distribution 1,329,895 1,287,370 1,287,695 1,289,799

No of Units 1,071,783 1,071,783 1,071,783 1,071,783

NAV per Unit (RM) 1.2408 1.2011 1.2015 1.2034

Total Assets – RM2.2 billion

NAV per unit – RM1.2034


* Assuming 100% of realised net income is provided for income distribution

Gearing Ratio

Below SC limit of 50%Decrease

(1Q 2020 : 38.32%)

37.89%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

30-Jun

Prudent Capital Management


CPs RM118mRM118m

CPs

Next refinancing due in Dec 2021 Stable financial indicators

Average Cost of Debt

4.22%pa

Decrease

(1Q 2020: 4.24% pa)

Majority Fixed Rate Borrowings

Total Debt: RM844.37 mil(1Q 2020: RM844.43 mil )

Interest Coverage

3.19x

(1Q 2020 3.17x)

Average Debt to Maturity

3.07 years

Decrease

(1Q 2020 3.32 years)

SC Limit

Floating

rate,

54%

Fixed

rate,

46%

8

Debt Maturity Profile


CPs RM118mRM118m

CPs

RM(mil)

20%

Average debt to maturity : 3.32 years

14%

Note;

1. MTN - Medium Term Notes

2. CP – Commercial Papers

3. TL – Term Loan

40%

CP

RM130milMTN

RM60 mil

CP RM279mil

TLRM110mil

26%

TLRM117 mil

CP RM244mil

TLRM91mil

CP RM200mil

MTNRM20mil MTN

RM130 milCP

RM40 mil

Completed All Refinancing Due in 2020

Next Refinancing Due in December 2021

0

50

100

150

200

250

300

350

400

2019 2020 2021 2022 2023 2024 2025

CP RM200mil

MTNRM20mil MTN

RM130 milCP

RM40 mil TLRM117 mil

MTNRM341mil

CPRM244 mil

TLRM91mil

9


Quill Building 3 - BMW

Portfolio Update

@ 30 June 2020

Portfolio of Quality Assets

a) The Properties were valued by Nawawi Tie Leung Property Consultants Sdn. Bhd, an independent firm of professional valuer registered with the

Board of Valuers, Appraisers & Estate Agents Malaysia.

b) The Properties were valued by CH Williams Talhar & Wong Sdn. Bhd, an independent firm of professional valuer, registered with the Board of

Valuers, Appraisers & Estate Agents Malaysia.

c) The Properties were valued by Knight Frank Malaysia Sdn. Bhd, an independent firm of professional valuer, registered with the Board of Valuers,

Appraisers & Estate Agents Malaysia.

d) All properties were based on valuation as at 31 December 2019.

Quill Building 4

- DHL 2(c)

Quill Building 2

- HSBC (b)Quill Building 3

- BMW(b)

Quill Building 5

- IBM(c)

Part of Plaza

Mon’t Kiara(a)

Quill Building 1

- DHL 1(c)

TESCO Building

Penang(b)

Market Value

of

10 Properties:

RM2.14 bil(d)


Wisma

TechnipFMC (a)

Total NLA:

2.2 mil sq ft*Excluding car park

area

Portfolio

Occupancy

Rate:

90.4%

Menara Shell (a)

Weighted

Average Term

to Expiry:

4.40 years

Platinum Sentral

- KL Sentral (a)

11

Geographical Diversification

By Valuation

¹

Notes:(1) Other Klang Valley Area refers to Klang Valley generally excluding KL city centre, KL Sentral and Mont’ Kiara. Klang Valley

refers to Kuala Lumpur and Selangor State excluding Kuala Selangor, Sepang and Sabak Bernam. (2) The Properties were valued by Nawawi Tie Leung Property Consultants Sdn Bhd and CH Williams Talhar & Wong Sdn Bhd,

independent firm of professional valuers registered with the Board of Valuers, Appraisers & Estate Agents Malaysia.

Klang

Valley

76%

Cyberjaya 17%

Penang 6%


Cyberjaya

17%

Kuala Lumpur

City Centre

8%

KL Sentral

62%

Penang

7%

Mont' Kiara

6%

12

Diversified Segmental Contributions

Notes: (1) Office comprises Quill Buildings, Platinum Sentral, Wisma Technip and Menara Shell

(2) Retail refers to retail portion of Plaza Mont’ Kiara & TESCO Building Penang

(3) Car Park refers to car parking bays in Plaza Mont’ Kiara

(4) The Properties were valued by Nawawi Tie Leung Property Consultants Sdn Bhd and CH Williams Talhar & Wong SdnBhd, independent firm of professional valuers registered with the Board of Valuers, Appraisers & Estate Agents Malaysia.

By Valuation


Office

88%

Retail

Assets

10%

Car Park

2%

13

Government Linked

Office 10.7%

Retail

3.6%

Hypermarket /

Supermarket

14.4%

Education

1.6%

Banking

9.9%

Automotive

2.7%Logistics, 9.6%

Oil & Gas 31.8%

IT/ Electronics 5.7%

Services 3.6%

Insurance, 6.1%FMCG, 0.3%

Tenant Mix

By Net Lettable Area


Well Balanced Tenancy Mix

14

21%

14%

1%

45%

1%

17%

1%

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2020 2021 2022 2023-2024 2025 - 2032

Lease Up for Renewal by NLA - 30 Jun 2020

Lease Expiring

Renewed

Not Renewed

Lease Expiry Profile

- 19% of Total NLA due in 2020

% of net lettable area that are due for renewal

sq ft



Conclusion

Quill Building 1 – DHL 1

In Summary


Proactive asset management strategies to focus on tenant relations and

continuous building improvements

Prudent capital management strategies

Continue to explore yield accretive acquisition opportunities

Amidst COVID-19 managing cash flow and exercising financial discipline

1H 2020 : MQREIT Declares DPU of 3.43 sen

Achieved Realised EPU and Distributable Income Per Unit of 3.63 sen in 1H 2020,

8.4% higher than 1H 2019 Realised EPU of 3.35 sen

Declares DPU of 3.43 sen in 1H 2020 (being 94.6% of the distributable income for

1H 2020), similar to the distribution in 1H 2019. Lower distribution payout in 1H 2020

for prudent cash management in view of COVID-19 uncertainties

Approximately 36,000 sq ft of space due in 1H 2020, with 40% of these leases

renewed

MQREIT’s portfolio occupancy rate as at 30 June 2020 was 90.4%

Year 2020 Prospects – Ongoing Strategies

17

Thank you

For enquires, please contact:

Ms Joyce Loh

(General Line: 603-2786 8080)

(Fax : 603-2780 0098)

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